European equities touched fresh multi-month peaks on Monday, with technical charts pointing to a continued slow grind higher backed by tentative signs of improvement in the global economy and corporate earnings.

The index hit a fresh 4-1/2 year high, having posted its highest close since May 2008 on Thursday.

"The new high simply means that the trend is still bullish, and that with patience, another new high will follow. It is a buy and hold market," said Valerie Gastaldy, manager of technical analysis firm Day-By-Day.

"The next resistance is very far away, at 6,375. There is nothing really meaningful before."

The FTSE resumed a rally that took it to its highest closing level since early February 2011 on Friday, having slipped on Monday and Tuesday of this week.

The index is now up 3.4 percent for 2013 only a week into the year, just over half the total 2012 gain of 5.8 percent.

Valerie Gastaldy, who heads up Paris-based technical analysis firm Day By Day, said the strong close above 6,090 showed that the FTSE's uptrend was on track after a couple of days of consolidation.

"What is interesting is that we've reached an important resistance area for the index, at 6,100, but the market has not seen a strong reaction yet. We could have had a 2 percent drop immediately, but we're still seeing buying pressure even though it is at a strong resistance," she said.

"At this important resistance level, the bears don't seem to be taking over."

The STOXX Europe 600 index, the euro zone Euro STOXX 50 and Germany’s Dax moved into “overbought” territory on their 20-day Relative Strength Index, a momentum indicator, meaning that some shortterm sellers may start to take profit on the indexes in the coming days.

Charts on the STOXX 600 also showed the pan-European gauge closed at a resistance level, 285, that capped the index twice in May 2011.

“If you’re long, you should stay long and set a stop loss, but if you’re not long it’s pretty dangerous to buy now,” Valerie Gastaldy, the head of Paris-based technical analysis firm Day-By-Day, said.

“If we consolidate now it will not be a very steep fall, but if we get to (the 2011 peak at) 292, that will be really overstretched.”

She recommended setting a stop loss at 281, the higher end of a gap between yesterday’s open and the previous session’s high.

The STOXX Europe 600 index, the euro zone Euro STOXX 50 and Germany's Dax moved into "overbought" territory on their 20-day Relative Strength Index, a momentum indicator, meaning that some short-term sellers may start to take profit on the indexes in the coming days.

Charts on the STOXX 600 also showed the pan-European gauge closed at a resistance level, 285, that capped the index twice in May 2011.

"If you're long, you should stay long and set a stop loss, but if you're not long it's pretty dangerous to buy now," Valerie Gastaldy, the head of Paris-based technical analysis firm Day-By-Day, said.

"If we consolidate now it will not be a very steep fall, but if we get to (the 2011 peak at) 292, that will be really overstretched."

She recommended setting a stop loss at 281, the higher end of a gap between Wednesday's open and the previous session's high.